The good news, at least when you look at the numbers, is that unemployment went from a high of 14.7 % in April to end at 13.3% as of the end of May, with 2.1 million workers going back to work leaving 21 million unemployed. Of that number, 2.7 million temporary workers were recalled, but unfortunately, another 295,000 permanent workers were laid off.
Of the rehired temporary workers (such as waiters, waitresses, bartenders, etc.), many rely on tips for the majority of their income and they find themselves making a lot less than before the pandemic. Not only does the reopening allow less than full capacity in restaurants, bars, etc., but patrons are also not appearing to be tipping as in the past. Other hospitality workers like those in the hotel industry have no idea when, if ever, they will be rehired. The near future outlook looks bleak at this time with the airline industry saying that as of the Fall, they will lay off many employees just as soon as the requirement by the government bailout against layoffs ends as of October. At times like these, it is important for those who are experiencing financial difficulties to understand their options. Contact a New Jersey bankruptcy attorney today to discuss your situation.
Our New Jersey Bankruptcy Attorney Offers Guidance To New Bankruptcy Issues
Many consumers who have and continue to struggle to even collect unemployment compensation, let alone the additional $600 per week Federal stimulus payment, have been using their credit cards for everyday necessities. How will this charging activity on credit cards affect the filing of a Bankruptcy, which is an option that many Americans may need to choose? Bankruptcy laws allow a creditor (like your credit card company) to look back between 70 and 90 days of the filing of your petition to dispute any charge or combined charges for more than $500 for “luxury goods or services” (subject to the 90-day look back period) or “cash advances” more than $750 (subject to the 70-day look back period).
There is a strict process for the creditor to object to the discharge of these debts by filing an action within a prescribed period of time (which includes a timely filing of a Proof of Claim and a timely request for a determination of dischargeability). In the past, the issue has been centered around the definition of “luxury goods and services” versus necessities. Certainly pre-pandemic purchases of jewelry, appliances, computers, furniture, etc. were looked at as luxury items. Now, it is arguable that even certain purchases for home office equipment to keep your job (even at the reduced pay rate that many have been forced to accept to keep their job) may be a necessity. Certainly it would appear that using your credit card for utilities, rent, food, medicine, and insurance premiums, etc. are very arguably necessities.
Additionally, while in Bankruptcy, there is always the opportunity to make a negotiated settlement of any objected-to debt. This issue will be one that all New Jersey bankruptcy attorneys anticipate and expect will be an issue in Bankruptcy filings, as we continue to exit out of the pandemic into a new normal, with creditors no longer having the constraints of holding off on collection or as employers holding off on layoffs that have been tied to government bailouts or government safeguards start to layoff employees.
Speak With a Knowledgeable New Jersey Bankruptcy Attorney Today
Discussing your options with a New Jersey Chapter 7 and Chapter 13 bankruptcy lawyer as we go through and upon exiting this never-before-seen-in-history event will allow consumers and small business owners to be informed of their choices and options under the Federal Bankruptcy Code.
It continues to be the hope of all involved with creditor/debtor rights that the private debt collection companies, mortgage companies, credit card companies, utility providers, car lending companies, unsecured loan providers, cell phone carriers, Internet/cable providers etc. will offer options to help all consumers and small business owners catch up on late payments or restructure payments; however, if they do not, then they need to know their rights for debt relief through Bankruptcy.
Discuss your options under Chapter 7 or Chapter 13 with one of our New Jersey bankruptcy attorneys in confidence. To schedule a free, no-obligation consultation at Helmer, Conley and Kasselman, call us at 609-281-8581 or tell us how we can help online today.